Oil prices lost ground on Monday after mediators said the United States and Iran had agreed to pursue a final settlement within 60 days, easing some of the concerns that had pushed crude higher earlier in the session.
Qatar and Pakistan announced the framework following negotiations at the Bürgenstock resort in Switzerland, where American and Iranian officials met for the first time since signing an interim agreement the previous week. The mediators said specialist discussions would continue over the coming days, supported by a senior committee responsible for guiding the process and resolving disputes.
Brent crude futures for August initially rose during Asian trading before reversing course. The international benchmark was down 0.38% at $80.26 a barrel. U.S. West Texas Intermediate futures for July remained about 1% higher at $77.52, having earlier gained roughly 3%.
Trading has remained volatile as investors weigh diplomatic progress against the possibility of further military confrontation. U.S. President Donald Trump warned on Sunday that Washington could resume action against Iran if the country failed to meet its obligations under the temporary agreement.
His comments came as Vice-President JD Vance held talks with Iranian representatives in Switzerland. At the same time, Tehran announced that it had again closed the Strait of Hormuz, one of the world’s most important energy shipping routes. Any sustained disruption could limit exports from Gulf producers, increase transport costs, and place renewed pressure on global fuel prices.
The interim memorandum signed last week was intended to preserve a fragile ceasefire for at least two months. It included commitments to restore shipping through the strait and halt hostilities elsewhere in the region, including Lebanon.
Iran has accused Washington of failing to secure an end to fighting there. Tehran also said the latest discussions would focus on implementing the existing arrangement rather than addressing wider issues, including its nuclear programme.
David Roche of Quantum Strategy said regional oil availability appeared close to pre-conflict levels once crude held in storage and aboard tankers was included. However, he warned that supplies were being supported by falling inventories rather than recovering production, leaving the market exposed once those reserves run low.
Goldman Sachs has said prolonged supply disruptions could also accelerate the adoption of electric vehicles, weakening long-term oil demand.